Briefly explain the reason each of the bullet points below for the shock in the saving rate shown in the slide below.

The Solow-Swan Model Shock Analysis Case 1: saving rate s shocked up at t = 0. A . At t = 0: 2 . s up, so K* up. . k(t) unchanged (unch). CAE COMPONENTS 0 . Negative gap created. -2 K* . t1/2 unch. 2 0: 35 . k(t) evolves to K*. 30 PER CAPITA INCOME (currency) . Gap relaxes to zero. . gr > 0 and gr/ increased 10 during relaxation. . Long-term gr / unch. -10 10 20 30 40 50 TIME (year) Lecture 6 - Solow-Swan Model II: R. J. Hawkins Econ 100B: Macroeconomics 12/ 16Briey explain the reason each of the bullet points below for the shock in the saving rate shown on slide 12 of lecture 6. a At t = O: 3 up, so 5* up. sit) unchanged (unch). Negative gap created. tl/g 1111011. Balanced growth up. Y(t)/L(t) unch. o For t > O: 5(t) evolves to 5*. Gap relaxes to zero. gn=0fort0fort>0 gm, > 9E during relaxation. Long-term gY/L in unchanged from its value for t